Budget 2027 optimism lifts ringgit despite external headwinds

At the opening of the market in Kuala Lumpur, the Malaysian ringgit showed signs of optimism as it edged higher against the US dollar. In the first 30 minutes of trading, the ringgit was observed trading between 4.0815 and 4.0900, a slight improvement from Monday's closing rate of 4.0820/4.0865. However, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid cautioned that geopolitical tensions in the Middle East could present challenges.

The recent missile attacks in Saudi Arabia have raised concerns that the conflict could escalate, potentially disrupting crude oil supplies. This has led to a rise in Brent crude oil prices by 1.38% to US$106.16 per barrel, contributing to a 0.35% increase in the US Dollar Index (DXY) to 102.573 points. Additionally, the US Consumer Price Index (CPI) inflation rate, scheduled for release on Wednesday, is expected to rise to 3.6% in September, up from 3.4% in August, according to consensus estimates.

Afzanizam noted that these factors could cause the ringgit to continue trading within a narrow range. Throughout the morning, the ringgit exhibited varied performance against other currencies. It strengthened against the British pound, Japanese yen, and euro, while remaining relatively stable against the Indonesian rupiah and Philippine peso.

Compared to its peers, the ringgit showed moderate gains against the Singapore dollar and Thai baht.